The Bush Tax Cuts

Obama needs to make clear, and soon, that the Bush tax cuts will be allowed to expire in total, regardless of whether he is re-elected. Can anybody disagree with this at this point? Much of the S&P downgrade is predicated on the inability to raise revenue. Any takers among OTB commenters?

Comments

Despite the fact that so-called-conservatives make a fetish out of this it still is true that raising taxes broadly is the wrong thing to do in a recession. It is also politically unpopular both among the middle-class, average-voter type person and the ditto-brain lumpenproletariat.

My thought is that it gives Barack the chance of a lifetime to become the son of FDR and Harry Truman. He can run against both the ‘malefactors of great wealth’ and ‘the do-nothing congress’.

I’m still of the opinion that raising taxes — or cutting spending — is a mistake with the economy so weak. However, if I had to choose between cutting spending and raising taxes, I’d raise taxes every time because spending cuts are more contractionary.

It’s true that I only partially blame Bush for the economy. While he is responsible for creating the mess, the Republicans in congress deserve a share of the blame for sabotaging and obstructing anything that the Obama administration does to try and fix it.

It would be seen as nothing more than a blatant appeal to core Democrats groups. Taxes are going up and thus spending on those groups would also be going up.

The problem is that tax increases are not used to lower the deficit but are just used to fund more funding with a multiplier. If the government can tax another $400 billion a year out of the economy, the Democrats will increase spending by more than $400 billion.

Also, if Nancy Pelosi is the Speaker of the House in Jan 2013, then all of the promises to cut spending will be moot. Taxes will be going up but with no spending cuts (except for defense and law enforcement).

The problem is that tax increases are not used to lower the deficit but are just used to fund more funding with a multiplier. If the government can tax another $400 billion a year out of the economy, the Democrats will increase spending by more than $400 billion.

Admirable cynicism, but if true the budget never would have balanced in the past. But it has.

Really what I don’t like is that we close ourselves to the possibility of success. Revenue increases combined with spending cuts can work. Obviously. It’s math.

SuperDestroyer needs to bone up on history. Both Bush 41’s and Clintons tax deals led to reductions in spending, and the longest expansion any of us has seen. Critics then said these deals would destroy the economy. They were wrong then and they are wrong now.

Because the Democrats in the Senate and in the Obama Administraiton will refuse to sign anything unless there is more spending. If the Republicans in the House fight it, they get accused of shuting down the government.

The Republicans got nothing expect vague promises out of the budget. Yet democrats got everything they wanted in the deal except higher taxes.

In the long run the Democrats will get what they want, higher taxes, more spending and a smaller private sector.

Oh please. The Republicans have proven themselves to be far bigger spenders than Democrats. The national debt under Reagan tripled with his big tax cuts, huge defense and other spending increases. Likewise, under Bush II, the national debt more than doubled. Republicans falsely predicted that their tax cuts would increase revenues, which hasn’t been the case.